On Thursday I had a quick look at a number of shares that have found favour with brokers this week and been given buy ratings.
Today I thought I would look at the shares which brokers think you should avoid. Here are three shares which have sell ratings currently:
Commonwealth Bank of Australia (ASX: CBA)
According to a note out of Morgan Stanley, analysts at the investment bank have retained their underweight rating and $72 price target on Australia's largest bank. Despite seeing a small positive from the potential sale of its life insurance business, the broker continues to believe that structural and cyclical headwinds will weigh on its future performance. While I agree that FY 2018 may not be plain sailing, I think the recent decline in its share price does make it attractive again.
Harvey Norman Holdings Limited (ASX: HVN)
A note out of Citi reveals that its analysts have retained their sell rating and cut the price target on this retailer's shares to $3.10 following the release of its full-year results. The broker appears concerned with a slowdown in sales momentum and its free cash flow generation. I would agree with Citi on this one. I was very surprised with its decision to cut its dividend and lack of FY 2018 guidance. I feel this could be a sign that it is concerned by the impact that an Amazon launch could have on the business.
Webjet Limited (ASX: WEB)
Morgan Stanley has also retained its underweight rating and $11.35 price target on this leading online travel agent. According to the note, the broker appears to be concerned that the market may be expecting far too much from Webjet this year. It has pointed to a deceleration in bookings growth in August as a reason to lower expectations. While the broker makes some fair points, I believe Webjet's shares are great value for money currently. At 20x estimated FY 2018 earnings, I feel this is an undemanding multiple for a company growing as strongly as it is.
